Stress-especially chronic, uncontrollable stress-is an important risk factor for many neuropsychiatric disorders. The underlying mechanisms are complex and multifactorial, but they involve correlated changes in structural and functional measures of neuronal connectivity within cortical microcircuits and across neuroanatomically distributed brain networks. Here, we review evidence from animal models and human neuroimaging studies implicating stress-associated changes in functional connectivity in the pathogenesis of PTSD, depression, and other neuropsychiatric conditions. Changes in fMRI measures of corticocortical connectivity across distributed networks may be caused by specific structural alterations that have been observed in the prefrontal cortex, hippocampus, and other vulnerable brain regions. These effects are mediated in part by glucocorticoids, which are released from the adrenal gland in response to a stressor and also oscillate in synchrony with diurnal rhythms. Recent work indicates that circadian glucocorticoid oscillations act to balance synapse formation and pruning after learning and during development, and chronic stress disrupts this balance. We conclude by considering how disrupted glucocorticoid oscillations may contribute to the pathophysiology of depression and PTSD in vulnerable individuals, and how circadian rhythm disturbances may affect non-psychiatric populations, including frequent travelers, shift workers, and patients undergoing treatment for autoimmune disorders.